Divorce and mortgage

Author: attorney Justyna Plewińska

More and more often it is heard that what binds spouses the most is the mortgage. Unfortunately, there is a grain of truth in this statement. Why?

Divorce and mortgage

As a rule, the divorce decree does not have any legal effects on the loan agreement. The former spouses are still joint and several debtors towards the bank, which means that the bank can still expect repayment of the loan installments by each of the former spouses. Is there any way to solve this problem?

As soon as the marriage is concluded between the spouses, a joint property arises (unless a property separation agreement has been concluded, more about which HERE ), so basically what the spouses acquire during the marriage becomes their joint property. After the divorce is adjudicated, the accumulated property is divided. In cases concerning the division of property, including real estate encumbered with a mortgage loan, the settlement of the loan raised many doubts - various court judgments were issued. Often the courts assumed that the amount of the outstanding loan should be deducted from the value of the property.

Example 1: Divorce and Mortgage

If the apartment was worth 300,000 PLN, and the mortgage secured on it was 200 thousand. PLN, the value of the flat assumed for distribution was at most PLN 100,000. zloty. (the spouse who owed the repayment received PLN 50,000).

However, on February 27, 2019, the Supreme Court in a resolution in the case III CZP 30/18 stated that "the value of real estate is not affected by the law itself, but by the related debt, which in relation to the mortgage means the connection with liability for this debt . If there is no change of persons responsible for the debt, there is not sufficient reason to believe that the encumbrance affects the value of the property. '

Therefore, if no other relevant circumstances arise in the course of the case, the court will determine the value of the property, disregarding the mortgage burden.

Example 2: Divorce and Mortgage

If the apartment is worth 300,000 PLN, and the mortgage secured on it is 200 thousand. PLN, the value of the flat to be divided will be PLN 300,000. zloty.

At the same time, it should be noted that the above-mentioned resolution "does not exclude the pursuit of a claim between spouses for the return of the amount of the liability secured by a mortgage, repaid by one of them after the decision on the division of joint property becomes final" - i.e. loan installments paid after the conclusion of the case for the division of joint property , will be settled between the spouses.

Example 3: Divorce and Mortgage

In the simplest translation: a spouse who takes over the sole ownership of an apartment worth 300,000. zloty. repays the second spouse with the amount of 150,000 zloty. After repayment of the loan installments, the spouse who took over the apartment will be able to demand the return of half of the installments paid by him.

In my opinion, it should be emphasized that courts often take into account what the parties in a case for the division of joint property expect (especially when the conclusions are in agreement), because in the course of such cases important circumstances appear that affect the content of the decision. Thus, the fact that the above-mentioned resolution of the Supreme Court was passed does not exclude a different course of action by Courts adjudicating in cases for the division of property. The key is to draw the attention of the court examining the case to these important circumstances and to prove them - it is about, for example, some special personal or financial situation of the parties. The key position is the position of the Supreme Court of March 28, 2019. (reference number III CZP 21/18) " in a case for the division of the joint property of the spouses after divorce , including real estate encumbered with a mortgage securing the bank loan granted to the spouses, the court - by allocating this real estate to the property of one of the spouses - determines its value, if they do not argue against important considerations , disregarding the value of the mortgage charge ”.

Divorce and mortgage - ways to get a mortgage

Due to the fact that the Court deciding on the division of property, it is not possible to release any of the spouses from the obligation to repay the mortgage, the spouse who "does not receive" the real estate still remains the bank's debtor and his creditworthiness is reduced. Examples of getting out of this situation are:

- former spouses can sell the property and use the price obtained to repay the loan,

- one of the spouses takes over the entire obligation - but here you need the consent of both former spouses and the bank, which will assess the creditworthiness of only one person (it is obvious that it is always more convenient for a bank when it has more people obliged to repay a given loan , therefore, the greater chances of obtaining the bank's consent will be when the spouse taking over the real estate and the loan will "select" another person for the loan in place of the former spouse - i.e. a co-borrower.),

- partial repayment of the loan by both or one spouse (to improve the creditworthiness of the spouse taking over the loan) and the acquisition of the property with all debt by one of the ex-spouses (the above with the consent of the bank and both ex-spouses).

Of course, there is an option to rent the encumbered property and pay off the loan taken out of the rent obtained - it is known that in this case the former spouses would have to communicate (which may be a problem), as they would still be co-owners of one property.

Thus, as indicated above, the problems that arise in divisions of property when the property is mortgaged may last longer than the marriage itself. It is important, however, to handle such cases with special care, in order to consider what specific goal you want to achieve before initiating the case, because the consistency of the position of a given party in the course of the proceedings is an element assessed by the Court when issuing a decision. Cases of division of property undoubtedly shape the financial and personal situation of each ex-spouse (and their children) for a long time, if not for life, and therefore before you act, although consult a specialist.

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